G.R. No. 210858 , June 29, 2016
DEPARTMENT OF FOREIGN AFFAIRS, Petitioner, vs. BCA INTERNATIONAL CORPORATION, Respondent.

FACTS

Petitioner Department of Foreign Affairs (DFA) and respondent BCA International Corporation (BCA) entered into an Amended Build-Operate-Transfer Agreement dated April 5, 2002, for the Machine Readable Passport and Visa Project. A dispute arose, and pursuant to Section 19.02 of the Agreement, which provided for final settlement by an arbitral tribunal under UNCITRAL Arbitration Rules, BCA filed a Request for Arbitration. An ad hoc arbitral tribunal was constituted on June 29, 2009. On April 15, 2013, the tribunal approved BCA’s request to apply in court for the issuance of a subpoena. Consequently, on May 16, 2013, BCA filed a “Petition for Assistance in Taking Evidence” before the Regional Trial Court (RTC) of Makati City under the Implementing Rules of Republic Act No. 9285 (The Alternative Dispute Resolution Act of 2004). The petition sought subpoenas ad testificandum and duces tecum against the Secretaries of Foreign Affairs and Finance, the Chairman of the Commission on Audit, the Executive Director of the DTI-BOT Center, and the Chairman of the DFA MRP/V Advisory Board, to compel testimony and the production of numerous documents related to the project’s implementation and the dispute. The DFA opposed the petition, arguing the RTC had no jurisdiction because the arbitration was international commercial arbitration governed by the UNCITRAL Model Law, and that the petition violated the doctrine of executive privilege and the principle of separability of the arbitration agreement. The RTC granted BCA’s petition in its Resolution dated September 2, 2013, and denied DFA’s motion for reconsideration in its Orders dated October 11, 2013, and January 8, 2014. The DFA filed a petition for review directly with the Supreme Court.

ISSUE

Whether the Regional Trial Court has jurisdiction to grant a petition for assistance in taking evidence, filed by a party to an international commercial arbitration, against executive officials of the Philippine government.

RULING

No. The Supreme Court granted the petition and reversed the RTC’s orders. The Court held that the RTC had no jurisdiction over BCA’s petition. The arbitration between DFA and BCA, being an ad hoc arbitration seated in Pasay City, Philippines, and governed by the UNCITRAL Arbitration Rules as agreed by the parties, is an international commercial arbitration. Under Republic Act No. 9285 , specifically its Chapter 4 (International Commercial Arbitration) which adopts the UNCITRAL Model Law, the proper court for applications for assistance in taking evidence is the Regional Trial Court only if the place of arbitration is abroad. Since the place of arbitration in this case is in the Philippines (Pasay City), the proper recourse for a party seeking court assistance in evidence-taking is to file the application directly with the arbitral tribunal, pursuant to Article 27 of the UNCITRAL Model Law. The RTC, therefore, acted without jurisdiction when it entertained and granted BCA’s petition. The Court did not find it necessary to rule on the other issues raised by DFA, such as executive privilege and separability, as the lack of jurisdiction was dispositive. The arbitral tribunal retains the authority to act on any request for assistance in taking evidence.